Eureka daily sentinel. [volume] (Eureka, Nev.) 1871-1887, 1887-08-05
THE Silver SPECULATION.

An Eastern exchange is fearful lest the
use of bullion certificates, as proposed by
ex.Secretary Manning and ex.Treasurer
Jordan, will cause an imitation OF the
currency. The new bank proposes to
issue bullion certificates to represent an
equal amount OF silver bullion in the
vaults of the bank. If a certificate is
issued which does not represent bullion
deposited, but is simply a promise Of the
bank to make good the differences in the
market value Of silver On n date and
another, it is practically o counterfeit
and should be treated as such. But the
proposition of the Manning.J ordan bank
is to issue certificates to represent silver
bullion actually on deposit in amounts OF
one thousand ounces. Any imitation
which can result from such issue must be
limited by the amount Of silver actually
deposited. The bank will receive silver,
store it in vaults, issue certificates against
it and use those certificates in the Stock
Exchange for what they are worth. It
is not designed that they shall pass into
general circulation, but If they should
no great imitation of the currency
would follow, since the certificates
cannot represent silver that does not
exist. The normal condition of u
metallic money is that all the bullion OF
either metal may be coined and used as
money. 1t never has been feared that
the country would be ruined by too much
metallic money. Initiation comes from
issues Of paper representatives of money
in excess of the metallic money held to
redeem such issues with. We suppose
means will be taken to assure the public
that the silver certificates that may be
issued by the Manning.Jordan bank will
represent bullion actually deposited.
Such certificate of deposit certainly
should not be issued simply as evidence
of indebtedness of the Manning.Jordan
bank. There is not an individual or firm
in the country whose paper should be al.
lowed to enter into the general circula-
tion of the country. But a certificate Of
deposit is quite a different matter. There
is no element of credit in such an issue.
1t represents nothing that does not exist.
It makes no difference who makes such
issue, except that the condition should
be such that the public should be assured
that the bullion is In the vault as repre-
sented. An issue Of silver certificates
with proper safeguards would without
doubt cause a rise in the market price of
silver. That price is determined by the
law of supply and demand, which is SUBJ
iect to influence at both ends. An in.
crease in the demand has the same effect
as a corresponding decrease in the sup
ply. Now, to the extent of the silver
locked up, the supply is decreased. If
S.. 600. 900 of the output Of the silver
mines of America is locked up in the
Manning.Jordan bank vaults. it is SO
much silver for the time withdrawn from
the market. The demand for other pur-
poses remaining the same, the decrease
in the supply will cause a rise in prices.
The price of silver is nominally fixed in
London, but absolutely fixed by the
amount that is sent to London. England
produces no silver of her own, but buys
what she needs. She buys as cheap as
she can, but if holders will not sell at
her prices a higher price is offered. In
this way the market price is increased
until the price offered meets the views of
holders. The country that will really
fix the price under such conditions is that
which produces silver and is able to hold
it. If the Manning.Jordan bank or any
other bank or individuals will buy all
the silver bullion offered at q certain
price and hold it, they can compel a rise
in the market value of that metals.